SRT Marine Systems plc (SRT), a global provider of maritime domain awareness systems and technologies for security, safety, and environmental protection, is pleased to announce that it has agreed a substantial investment and short-term finance bridge support package from existing shareholder Ocean Infinity (OI), worth approximately £31 million.
Finance support package
This new financing allows SRT to immediately satisfy the need for the substantial performance bond required under the terms of the recently announced $213 million contract, which is expected to be signed and commenced on Thursday, October 31st, 2024.
It also provides a foundation to support the simultaneous proceeding of three other contracts worth an additional $210 million during the next quarter. All four contracts will have parallel implementation periods over the next two years, with follow-on support phases of up to 10 years.
Components of the package
The finance package has multiple interlinking components as defined below:
- SRT will issue up to 21.5 million new ordinary shares at an issue price of 35p per share by way of a placing which is entirely underwritten by OI, raising gross proceeds of £7.5 million. Existing shareholders will be given the right to acquire up to a maximum of 7.5 million shares in aggregate, with OI reserving a minimum of 14 million shares. Subject to shareholder approval, the Company has agreed to complete the fundraising at the earliest opportunity in November. A further announcement will be made in due course.
- OI has provided a $21.4 million guarantee to SRT to enable SRT to issue a contract performance bond of similar value. The OI guarantee is initially provided as a cash loan of $21.4 million with an interest rate of 0.75% per month. The loan is expected to be repaid by SRT with a period of approximately one month and replaced with a bank guarantee on OI's behalf. The OI bank guarantee itself will then be replaced within the next 6 months using a combination of SRT's own resources and UKEF export guarantee programme. In return for providing this guarantee, OI is being granted 20,000,000 warrants at a strike price of 35p, with an exercise period of 3 years, which when exercised will inject a further £7 million equity for SRT. In the event that SRT does not replace the OI guarantee within 8 months, a further 4 million warrants per month will be issued with a strike price equal to a 15% discount on the share price at the relevant time.
- Oliver Plunkett, Board Member and CEO of OI, will join SRT's board as a Non-Executive Director, following the completion of the placing.
Transformational leap
Simon Tucker, CEO of SRT Marine Systems, commented, "This financing package enables SRT to make a truly transformational commercial leap and very significantly accelerate the financial performance of the Company through the simultaneous delivery of over $400 million of contracts and with capacity for more."
Simon Tucker adds, "Besides the obvious product and technology synergies between OI and SRT in the MDA space, we are fortunate to have this level of support, which enables us to confidently deliver on these contracts, while also taking full advantage of our growing pipeline of future opportunities, which we expect to continue to grow, and deliver a flow of more new contracts."
Maritime data and systems
Oliver Plunkett, Group CEO of Ocean Infinity, commented, "This contract awarded to SRT in which Ocean Infinity will play a key supporting role is precisely the kind of opportunity to work together that we foresaw when we first invested in the Company. We strongly believe in the relationship, the wider market opportunity for maritime data and systems, and the long-term potential for both companies to continue working together to benefit our clients and each other."
Oliver Plunkett adds, "That long-term vision is why we have seized this opportunity to provide additional equity funding to SRT, as well as help out in the short term with a bridge guarantee, which will facilitate SRT providing the necessary up front contractual guarantees to their customer, as they wait for UKEF to complete their processing."
